Obamacare And Republican Tax Ranting
Most Americans don’t understand the tax aspects of the Affordable Care Act (Obamacare). And a good thing, too. At least from the Republican electioneering standpoint.
If people understood that almost all the tax increases in this Act are targeted, that they take the form of a bigger Medicare tax (of less than one percent) that only applies to people making more than $200,000 a year, and a cadillac tax on the kind of health plans favored by high income earners, “the biggest tax increase in history,” as Republicans like to label Obamacare in their new attack ads, would seem absurd.
The biggest confusion and the most flagrant Republican misstatements about Obamacare and taxes, of course, involves the law’s mandate that people who choose not to participate must pay a penalty, which the Supreme Court decided is actually a tax. And because it is “a tax,” and because real Americans hate all taxes, and because real Americans should also have the right not to be covered by health insurance if they so choose, this is deemed a great campaign issue for Mitt Romney and Republicans generally.
Has there ever been an argument so inherently stupid?
About 16 percent of Americans currently have no health insurance of any kind. Which means 84 percent do, and these 84 percent would not be subject to an opt-out tax because they are already in.
Sixteen percent of 300 million-plus Americans is still a lot of Americans, however. Most of the people who currently are not covered, though, are children not subject to this opt-out tax. It’s only their parents who might be.
So maybe 8 percent of Americans would still theoretically be subject to this tax if they choose not to take advantage of the generous subsidies Obamacare offers to poor and middle class folks who account for almost all such people. But really. Can we be sane here?
Can we take off those ideological glasses just for a moment, and put down the Tea Party wacky-tabacky ranting pipe? How many people really wouldn’t want to be covered by health insurance if there are generous aids that let them get it? How many parents with kids would actually make such a choice?
Is there anything really debatable here? In the real world? Please.
But wait, you say. What about all those small businesses that will be hit with crippling new tax obligations because they must have a health plan for their employees or pay a new mandated tax? I have actually computed the number that would be so affected. Zero! The reason? Companies with less than 50 employees need not participate, and the government defines “small business” as those with less than 50 employees.
I don’t want to be too cute here, however. So again let’s look at the real world instead. Most businesses with more than 50 employees already have health plans in place. Such health plans have long been the most popular non-salary benefit offered by Americans companies. These companies won’t have to pay a penalty if they opt-out. They are already in.
Will there still be some companies with more than 50 employees that will be hurt by this mandate? Of course. It’s a big country with literally millions of businesses. But again, let’s try to think like adults.
Obamacare seeks to add more than 30 million people to the national insurance roles and have a near full-coverage system like the one in every other advanced country of the world — and some piss-poor countries, too, like Rwanda, where 96 percent of the population is covered by health insurance. To get close to this full-coverage goal has to cost someone tax money. With Obamacare, almost all the extra costs come from the top 5 percent earners.
So…Is this a good way to go, or should be stumble back to where we were before the law was passed and hope the Republicans to come up with something better?
These questions will not be addressed in this year’s Republican Obamacare attack ads. Let’s hope voters consider them anyway come election day.